Pharma industry expands electronic tracking of drugs

June 12, 2009

CVS, Merck, and Pfizer are just a few of the pharmaceutical heavyweights working together to electronically trace pharmaceutical products through the healthcare supply chain.

Orlando, Fla.--CVS, Merck, and Pfizer are just a few of the pharmaceutical heavyweights working together to electronically trace pharmaceutical products through the healthcare supply chain.

Manufacturers, industry associations, group purchasing organizations, and others came together about six years ago to share information on tracking drugs, and over the past year they have really gotten down to business, Bob Celeste, director, GS1 Healthcare US, told attendees at the recent U Connect 2009 Supply Chain conference here.

GS1 US, in Lawrenceville, N.J., was established 30 years ago to develop Universal Product Code (UPC) standards and is now developing traceability standards across several industries. The GS1 Healthcare group was formed to track drugs through the healthcare system, which could help prevent counterfeit or mislabeled products, or other problematic shipments, from entering and moving through transit.

Examples of tracking methods include RFID tags on boxes of products and identifiers such as GTIN, 14 digits that can be encoded into various types of data carriers, such as bar codes. The drug wholesalers, manufacturers, and retailers in the GS1 Healthcare group now realize it is just a matter of time before technology will be in place to track all drugs through the healthcare system.

“In the future, all pharmaceuticals will have an unique serialized identifier,” Celeste said. Interested parties in the healthcare system pay fees to participate in GS1’s Healthcare initiative.

The need for drug-tracking technology has become more urgent in recent years because of drug pedigree enforcement actions, according to Celeste. “Many states, including Florida and Nevada, have issued drug pedigree violations ranging from $18,000 to $1 million in fines,” he said.

An initiative of the California Board of Pharmacy (CBP) designed to combat counterfeit drugs by requiring an electronic pedigree on drugs also spurred the industry to develop standards for serialization. The CBP proposal, originally set for implementation in 2007, warned that retail pharmacies might not be able to receive drug shipments if the drugs did not carry electronic pedigrees from the manufacturers.

Because a system is not yet in place for all drugs to receive an electronic pedigree, the implementation date was pushed back to 2015 for manufacturers and a date later still for retailers. The FDA also has issued draft rules on tracking drug shipments through the system, with its 2008 proposal “Standardized Numerical Identification for Prescription Drug Packages.”

As a result of the CBP and FDA initiatives toward electronic serialization of drugs, participants in the GS1 Healthcare program have become more open about sharing information about their own processes, Celeste said. “The industry has come together and realized that we are going to move in this direction. They are asking, ‘What can we get out of this besides just compliance?’”

The benefits of tracing drugs through the system include better control of inventory and tracking drugs that are missing or stolen.

“In the future, we will have serialized data to say that not only were five bottles of ‘xyz drug’ stolen, but those five bottles had those five serial numbers. If those bottles show up anywhere else in the system, they would show up [to manufacturers, wholesalers, and retailers],” Celeste said. This may help retailers get reimbursed more quickly from manufacturers, in the case of lost or stolen drugs.

Celeste said that knowing where drugs are in the system also ensures patient safety and increases efficiency. “Being able to say that this item is in transit, dispensed, or stolen, creates a new kind of environment where the industry sees more granular data and better data. It is a finer level of being able to manage your inventories,” Celeste said.

Currently, drugs are tracked through the system by means of invoices, bill of lading documents, and phone calls. “As the drug pedigree move through the supply chain from manufacturer to distributor to pharmacy, the information on the product grows. There are a number of exceptions, such as inaccurate pedigree, a missing shipment, and extra items in the shipment. Today we handle those exceptions by phone call, but we are trying to solve that by traceability,” Celeste said.

To that end, GS1 US’s Healthcare initiative will continue to involve more drug chains (besides CVS) in developing the serialization process, along with healthcare facilities and manufacturers of pharmaceutical products and medical devices.